Travelling around Europe on my TechCrunch Euro Tour one of the topics of conversation I hear almost constantly is the desire for more seed funding for startups. Right now there is no such thing as Ycombinator-style incubator for startups which is pan-European. However, the closest thing we have to that concept – a startup competition where the prize is a cash injection to get the product built in exchange for a stake – is Seedcamp.
Inside a year since it’s launch last September, Seedcamp CEO Reshma Sohoni has clocked up many more air miles than most, running “mini Seedcamp” days and talking up the concept at myriad conferences around Europe. Her tireless work will pay dividends, though, when many of Europe’s best brightest early stage startups descend on London for Seedcamp’s annual week-long intensive hothouse. (The application for is online now and the deadline is deadline is Aug 10. Here’s a list of key dates).
Looking back at last year’s winners, it’s clear that there was a fascinating range of companies which pitched at the event. Even some which didn’t make it through – like School of Everything – ended winning backing from Channel 4.
In an interview with TechCrunch UK, Sohoni revealed that they’d learnt a lot from the first event.: “We’ve tweaked it from last year. There are now a lot more guidelines on how to answer the questions when submitting your startup for instance.”
Travelling around Europe, Sohani has been in a position to observe the culture surrounding entrepreneurs in many different countries. Europeans are often characterised as fearing failure, or ridicule after failure, and while she says that culture does still exist, she says that the younger generation are shrugging off the hesitancy of the past. “The generation coming up now is really passionate and excited by what’s happening around them. There is a big generation gap between older and younger participants in startups. There’s a definite shift going on.”
She also says that the market is maturing along the lines of Web 2.0, as in having CTO’s at the highest levels of the company. “In Poland I saw developers who have been used to being outsourced talent and who are now starting to shift towards doing their own company. It’s still going to take a while to build many ambitious companies but it’s all moving in the right direction.”
Of course there are differences in Europe: “I found France much more traditionally minded than in other places, like Eastern Europe. The new European economies have entrepreneurs with a much hungrier attitude than some startups in the UK or France. In Germany I was blown away. The quality of local mentors was amazing. They were much more polished than many others.”
However, the problem of clones, or copy-cat startups remains in Europe: “In some markets there are lots of similar sites and even clones sites similar to eachother. In one country we had, like, five companies all in the Web music space. Now and again you find one company trying to clone everything they can find. They clone a site fast, and then see if it sticks, instead of focusing on a specific need.”
European business Angels, traditionally the saviour of many a startup in search of seed funding, are active to varying degrees across Erope, but Sohani thinks they are not usually the best route, as they often lack tech industry experience and cannot offer mentoring in the Web business.
“We noticed in Germany that individual investors are happy to back some companies targeting local markets but sometimes they don’t think big enough, or go international. The Angel community needs to think more internationally in Europe,” she says. “Money alone isn’t just going to help Early stage companies. You need to know how to launch betas get the PR right, how to contact the right bloggers, etc.”
Seedcamp will also continue its residence in London: “We really feel that London is a critical hub for bringing these teams together. London is important because the mentor network is constantly coming in and out of London.”
They are also changing their investment in the Seedcamp winners. Last year it was a 10% equity stake in the winning companies, which some outside observers considered high. However, this year they will vary the range, and the funding, so taking a variable level up to 10% and a varying amount of investment of between 30-50,000 Euros. This year will also feature a lot more focus on building the product, with less emphasis on PR-ing and marketing the startup.
It’s clear though, that with people like the founders of Skype being mentors at the competition week last year, Seedcamp retains probably the biggest the pulling power out of many startup-focused events in Europe.